The former Blackburn and Aston Villa player took over the job on a caretaker basis following the sacking of Colin Hendry in early November.
His first game was the 5-2 televised thrashing of United.
Chairman Karl Oyston said: "We have been impressed with the way Simon has conducted himself, and are beginning to see the rewards.
"He has worked tirelessly, the players have responded to his style of management and I believe he can guide us away from the relegation zone."